EU backs ComReg decision to restrict Eir on fibre broadband

The European Commission has agreed with ComReg’s decision to restrict Eir’s ability to offer discounts for its wholesale fibre broadband service over the next five years.

In a market access review published on November 14th, Irish regulator ComReg once again designated the telecoms company as having “significant market power” (SMP) in the market for wholesale central access to fibre broadband.

The decision puts a floor on what Eir can charge for access to its wholesale fibre broadband network – which accounts for about a quarter of its revenues – meaning rivals would be able to undercut it on pricing.

It obliges Eir to provide products and services at regulated wholesale prices to rivals who do not have networks or who have insufficient network coverage of their own. This is designed to allow them to compete in providing retail fibre broadband services to homes and businesses.

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On Thursday, the European Commission published its decision on its review of ComReg’s findings after its 30-day review of the national regulator’s findings. It said it agreed with the regulator’s assessment that Eir has significant market power, adding that the market in the Republic “is characterised by high and non-transitory barriers to entry due to the large size of [Eir’s] network and the correspondingly large investment to replicate it”.

[ Eir complains to EU about ComReg’s decision to restrict its wholesale fibre broadband offering ]

It concluded that the market does not “tend towards effective competition, as there is no current or potential alternative to the existing physical infrastructure and there are no technological advancements that would enable rapid deployment or optimised use of alternative physical infrastructures”.

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In a statement, ComReg said that to ensure fair competition, the commission “gave the green light to continue regulating the next generation fibre lines that Eircom rents out to retail telecom companies”.

ComReg said the commission had welcomed its wholesale pricing proposals, noting “these should encourage ongoing investment and innovation in next generation broadband services, including Fibre-to-the-Home (FTTH)”.

It added: “Ensuring fair competition means that, ultimately, consumers can benefit from having a wide choice of service providers offering high-quality next-generation broadband services at competitive prices.”

In its initial decision, ComReg found that Eir has SMP in two wholesale broadband markets: wholesale local access and physical infrastructure access. Consequently, it said Eir should be subject to a range of regulatory requirements to provide wholesale access, subject to a price control framework.

[ Eir claims regulatory decision limits its ability to compete in market ]

Eir chief executive Oliver Loomes said at the time that ComReg’s decision would prevent it from offering discounts to wholesale customers. “We will have at least a hand tied behind our back in that we can’t discount our prices while other competitors in the market can do whatever they want with our prices,” he said.

“That doesn’t seem right, or fair or balanced. We disagree with ComReg and we’re asking the commission to intervene.”

Separately, Eir has launched a High Court challenge against a 2018 ComReg decision that it says limits its ability to compete in the wholesale broadband market.

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